MPs critical of Post Office financing

MPs have claimed there is little transparency about the way the Post Office is financed by taxpayers' money.

The business and enterprise committee today published a report also warning that the independent review of the mail services and Postcomm must take full account of the effects of any reforms of mail services on the post office network.

The report highlights the close operational and financial relationship with the Royal Mail and the Post Office Network and suggests "there would be public outcry if changes to mail services resulted in further reduction of the network".

MPs claim £1.7 billion of government money has been allocated to the Post Office until 2011.

"Post Office Ltd is the subsidiary of a company owned by the government and it receives substantial taxpayer support, yet there is little transparency about its finances. This is simply unacceptable," said Peter Luff, chairman of the select committee.

The report follows the committee's previous work, Network Change Programme, published in February, which intended to reduce the losses the Post Office was making by closing up to 2,500 sub-post offices.

And part of today's report is made of responses to that work.

MPs welcomed the fact that the government has said it does not wish to see the number of post officers fall to below 11,500 by 2011. However, the Post Office itself told the committee that it did not believe "it is possible or desirable to set a minimum number of fixed outlets".

"It is essential that the government and Post Office Ltd are singing from the same hymn sheet to eradicate doubts that there will be further closures after 2011," said Peter Luff.